Jeff Bezos

CEO of Amazon
Net worth:* $201 billion
True tax rate:** 0.10%
Average warehouse worker salary: $31,329
Average worker tax rate (federal):*** 14%

Elon Musk

CEO of Tesla
Net worth: $297 billion
True tax rate: 3.27%
Tesla technician salary: $62,520
Worker tax rate: 18%

Warren Buffett

CEO of Berkshire Hathaway
Net worth: $100 billion
True tax rate: 0.10%
Worker salary at Coca-Cola:**** $46,532
Worker tax rate: 34%

Michael Bloomberg

CEO of Bloomberg
Net worth: $70 billion
True tax rate: 1.3%
Average reporter salary: $101,664
Worker tax rate: 22.54%

Mark Zuckerberg

CEO of Meta (formerly Facebook)
Net worth: $116.1 billion
True tax rate: unknown
Meta employee salary: $124,000
Worker tax rate: 24.17%

Tim Cook

CEO of Apple
Net worth: $1.4 billion
True tax rate: unknown
Apple software engineer salary: $174,369
Worker tax rate: 25.36%

*All dollar amounts are U.S.
**To calculate CEOs’ true tax rates, ProPublica compared the federal taxes they paid from 2014 to 2018 to how much Forbes estimated their wealth grew during that time.
***Average worker tax rate includes federal income tax, social security and medicare taxes.
****Top holding

The post Knight Bites: Mind the billionaire wealth gap appeared first on Corporate Knights.

SCP was founded by tech entrepreneur Bill Young, who made two fortunes in the 1990s and has spent 20 years giving away money to boost the prosperity of people who face employment barriers. SCP has gone through three phases: investing directly in social enterprises, developing innovative social-finance tools, and promoting innovative employee-training programs. Now Young and his team are focusing on a new solution: enhancing workers’ capital, rather than income, to increase prosperity and their resilience to economic shocks (say, the next pandemic).

How do people accumulate wealth? Usually through financial assets, such as stocks and bonds. After exploring various paths, SCP concluded that putting more shares into employees’ hands solves multiple problems:
• it helps workers build long-term wealth;
• it avoids the risks of new, inexperienced leadership after the founders or owners sell; and
• it bypasses the nefarious private-equity investors, who snap up companies in transition, looking for fast paybacks through mergers, layoffs and asset sales rather than by stewarding ongoing growth.

In addition, says SCP partner Jon Shell, worker-owned companies fare better than conventional businesses. In the U.S., where legislation encourages companies to borrow money to transfer shares at no cost to their employees over time, research indicates these firms grow faster, achieve higher profits and pay employees more.

The U.S., says Shell, now has about 6,400 employee-owned companies, with 14 million employees who share – wait for it – US$1.4 trillion in wealth. Canada, sadly, has only a handful of such companies – because our employee-stock-ownership plans (ESOPs) are mainly designed to sell (not give away) shares. And those shares go mainly to an elite group of affluent executives.

Moreover, when SCP investigated the U.S. landscape, it saw an untapped opportunity – to encourage huge pension funds to invest in ESOP companies. (Their loans compensate owners for giving up equity and are repaid over time from the proceeds of the business.)

SCP is now taking a two-pronged approach to encouraging employee ownership. First, it’s encouraging Canadian pension funds – many of which are looking for more opportunities for impact investing – to start lending to American ESOP companies. “If we can demonstrate how pension money can be used to support employee ownership while generating an attractive return,” he says, “we think we can move billions of dollars into the sector, resulting in billions more in employee wealth.”

Second, SCP has launched a campaign to bring more robust ESOP legislation to Canada, to give lower-income employees a better chance to build wealth. Shell says SCP is embarking on a lobbying campaign to get Canada to adopt the American “employee ownership trust” model, as the U.K. did in 2014. Since then, he says, employee ownership in the U.K. has grown 150%.

After years of opposing wealth concentration, Shell believes SCP has finally found a winning strategy. “It often seems we’ve been fighting an almost impossible battle. But for the first time it feels like we have a tank, not just a pistol.”

The post Want to perform better? Become worker-owned appeared first on Corporate Knights.

That new reality is evident in the business world’s response to the snowballing Black Lives Matter movement. Polling indicated that most Americans were opposed to BLM when it started taking hold in 2013. But in the weeks following the police killing of George Floyd in Minneapolis in May, BLM supporters had come to outweigh opponents by 28 percentage points, according to a survey by Civiqs, an online research firm.

Business reaction has hardened from feel-good statements against racism to more tangible measures with a longer-lasting impact. Netflix has promised to earmark 2% of its cash holdings – up to US$100 million – for banks to “directly support Black communities in the US.” That’s in addition to the US$120 million that Netflix CEO Reed Hastings donated to historically Black colleges and universities two weeks prior. Netflix has also added a Black Lives Matter genre to its lineup, celebrating the work of Black artists and Black history.

The power of social media has undoubtedly played a key role in shaping the response. Three of the United States’ biggest retailers – Walmart, Walgreens and CVS – said they would no longer display African-American beauty products behind locked glass after Twitter lit up with images of juxtaposed photos: one of easily accessible generic beauty products, the other of locked-away items aimed mainly at Black customers. One month later, Walmart also committed US$100 million over five years to create a new centre on racial equity.

Several companies have set specific targets for broader representation in their senior ranks.

Google, for example, has pledged to boost its leadership diversity by 30% within the next five years, in addition to pledging US$175 million to Black businesses and start-ups.

There is still a long way to go. While Black people make up about 13% of the U.S. population, they hold just 3.2% of executive and senior management positions and fewer than 1% of Fortune 500 CEO spots, according to the Center for Talent Innovation. Corporate Knights found that less than 1% of corporate leaders at TSX 60 companies are Black.

Zero

Yes, it is possible to go from Hero to Zero in a few short months. Just ask the workers at Walmart, Loblaws – Canada’s biggest supermarket chain – and the U.K.’s Tesco and Marks & Spencer, among others.

As the COVID-19 pandemic broke in early spring, food retailers lauded the contribution of cashiers, shelf-stackers and warehouse staff by jacking up their pay and benefits as compensation for the risks they were taking to get food to our tables. The typical raise was 10 to 15%, or about two dollars an hour.

Alas, Hero Pay did not last long.

By June, most of the companies had rolled back the increases. Loblaws chairman Galen Weston justified cancelling the “temporary pay premium” on the grounds that “things have now stabilized in our supermarkets and drugstores. After extending the premium multiple times, we are confident our colleagues are operating safely and effectively in a new normal.”

Some employers sought to soften the blow with other benefits. Loblaws added a one-time $160 bonus to workers’ July pay, pro-rated to a 40-hour work week. Walmart offered extra counselling services and higher staff discounts on purchases.

Not surprisingly, the workers, many of them at the bottom of the pay scale, are nonplussed. “The pandemic is not over,” noted Jerry Dias, the president of Unifor, Canada’s biggest private-sector union. “The danger has not passed. These workers are no less at risk and are no less essential today than they were yesterday.”

It’s not as if the employers could no longer afford to be generous. Empire Co., the Canadian group behind the Sobeys, FreshCo and Safeway chains, hiked its dividend less than a week after chopping its Hero Pay program. The company reported a 47% jump in net earnings for the quarter ended August 1.

Two dollars an hour may not be a huge amount of money – either for those giving or receiving it. But the extra wages did signal respect and appreciation for a group of workers who enjoy few other perks of corporate life and have exposed themselves to greater risks than most others outside the healthcare sector.

This was a perfect opportunity to narrow the widening gap in pay between those at the top and the bottom of the corporate ladder. Too bad that the grocers weren’t heroes for long.

The post Heroes & Zeros: Black Lives Matter vs. Loblaws appeared first on Corporate Knights.

When the World Economic Forum (WEF) released its “Global Risks 2014” report last January in advance of its annual meeting in Davos, Switzerland, it named the “worsening wealth gap” as the year’s biggest risk.

To outside observers, WEF is in many ways the embodiment of that global risk. It is the annual gathering of the world’s super rich, peppered with artists, academics and scientists to boost discussion and enlightenment. About 1,700 private flights are scheduled to swoop down on this Swiss resort town over the next few days, with each return flight costing an estimated $28,000.

Free food will be plentiful, the parties will be lavish, and for those without a hangover, mindfulness guru Jon Kabat-Zinn will lead each morning off with group meditation.

WEF’s “Global Risks 2015” report, released last week, cites international conflict and the world’s growing water crisis as this year’s biggest risks. Income disparity didn’t even make the short list.

Does this mean the wealth gap is narrowing? Quite the contrary. A report released this week by Oxfam International says the problem is getting worse.

Oxfam warns that by 2016 the planet’s wealthiest 1 per cent will control just as much – if not more – of the world’s assets as the 99 per cent combined. Indeed, since 2009 the 1 per cent has expanded its slice of the wealth pie to 48 per cent from 44 per cent. Oxfam contends it will reach, and possibly surpass, 50 per cent sometime next year.

To be fair, if the WEF picked the same No. 1 global risk every year the headline-framing press release would quickly get stale. The reality is that there are, in any given year, many global risks competing for international attention and most of them get discussed in Davos. In fact, the WEF did address the wealth gap ahead of its meeting this week with the release of a 14-point plan of action that tackles everything from minimum wage to corruption.

Elitist as it is, WEF is effective at getting the planet’s wealthiest, brainiest and most politically powerful under one roof for a few days. Bill Gates, John Kerry and happy guy Pharrell Williams won’t solve the world’s problems in one week, but the occasion shines a light on these problems and allows for a sharing of information and commitment that can inspire action, hard as it may be to measure.

WEF is also an occasion that others can piggyback, drawing attention to their own research and causes. The Oxfam report is one of dozens expected to be released during the week. The United Nations Environment Programme, for example, will release a report called “Pathways to Scale,” part of an inquiry into designing a more sustainable financial system. The report will outline how banks, bond markets, and institutional investors can, with the right tools and policy, help redirect the flow of capital to achieve long-term sustainable development.

For 10 years now Corporate Knights has launched the annual Global 100 Most Sustainable Companies in the World ranking from Davos, where we also host an executive roundtable dinner. The dinner is an opportunity for leading business, finance and economic minds – from George Soros to Sir Nicholas Stern – to discuss ways of making capitalism more sustainable. This year’s topic is how to create a favourable investment climate to price carbon.

On Friday morning, Corporate Knights and the Schulich School of Business at York University will host the final round of the second-annual CK-Schulich Business for a Better World MBA case competition, which this year is aimed at making pharmaceutical giant Novartis a sustainable leader among its peers.

Teams from the University of Victoria, Simon Fraser University and Schulich have travelled to Davos to present their business plans in front of a live judging panel. The winning team will take home a $6,000 prize.

Throughout the week, Corporate Knights will file reports from WEF on issues that fall within our sustainable business mandate. We will pay particular interest to discussions around climate action, including a Thursday morning session titled “Closing the Climate Deal,” which is expected to build consensus and momentum toward reaching a global emission-reduction plan in Paris this December.

Many of the WEF sessions will be webcast live, including those with a focus on environmental and social issues. We’ve listed some of those sessions below in case you’d like to tune in. You can search for these on the WEF website, put them in your online calendar and schedule email reminders:

Wednesday 21 January

09.00 – 10.00 (3 a.m. EST)

The New Energy Context

How are technological, economic and geopolitical changes shaping the future energy landscape?

10.00 – 10.30 (4 a.m. EST)

What’s Next? A Climate for Action

Through a powerful visual narrative, Nobel Laureate Al Gore reveals what’s next for climate in 2015.

14.30 – 15.45 (8:30 a.m. EST)

The Geo-Economics of Energy

How are energy producers and consumers adapting to increasing uncertainty?

Dimensions to be addressed: Demand and supply uncertainty; Market volatility; Geo-economic shifts

Thursday 22 January

16.30 – 17.30 (10:30 EST)

Closing the Climate Deal

How can a comprehensive global climate deal be achieved in 2015?

Friday 23 January

09.00 – 10.00 (3 a.m. EST)

The BBC World Debate: A Richer World, but for Whom?

Are existing growth models failing to deliver jobs and address income inequality?

10.30 – 11.30 (4:30 a.m. EST)

Tackling Climate, Development and Growth

What resources and commitments are needed now to tackle climate change, development and growth?

12.30 – 14.00 (6:30 a.m. EST)

Employment: Mind the Gap?

Remuneration for top jobs continues to increase while mechanization and offshoring have eroded middle-wage jobs. Inequality in capital and income are on the rise and the trend shows no signs of abating. With 42 million people striving to join the workforce every year, is this trend reversible?

– What are the long-term concerns for youth in this tough market?

– What solutions could alleviate this trend in the short term?

– How can the labour market be re-organized? – Is globalization driving inequality?

18.00 – 18.15 (noon EST)

Sustainable Development: Demystifying the Facts

A thought-provoking presentation by Professor Hans Rosling that reveals the surprising trends shaping today’s world.

18.15 – 18.45 (12:15 p.m. EST)

Sustainable Development: A Vision for the Future

A discussion with Bill and Melinda Gates on catalysing action on the new Sustainable Development Goals

18.30 – 20.00 (12:30 EST)

Should Business Lead the Social Agenda?

Complex global problems are often left for international organizations and government to solve. As a result, we have failed to meet challenges such as the Millennial Development Goals. Businesses play an increasingly important role in the global system, and face growing pressure from millennial consumers and employees to align core operations with social impact. Can businesses help to find a solution to global challenges, and should these challenges really be tackled by businesses?

– Is business doing enough?

– Can business solve social problems and make a profit? What models exist?

– Do other stakeholder groups need to rethink their traditional roles?

Saturday 24 January

11.00 – 11.30 (5 a.m. EST)

An Insight, An Idea with Mario Molina

A conversation with Nobel Laureate Mario Molina on communicating the science behind climate change

15.30 – 16.30 (9:30 a.m. EST)

The Diversity Dividend

How can organizations embrace diversity to drive innovation and sharpen their competitive edge? Dimensions to be addressed: Paths for women in power; Ensuring LGBT inclusion; Diversity beyond borders

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